SQLite is not running a compression algorithm, but it will store data in a binary file instead of a text file. Which means that the data can be stored more efficiently, for example using a 32-bit (4 byte) number to represent 10,000,000 instead of storing it as 8 bytes of text (or more if the file is unicode).
Here are more details on the SQL Database File Format if you are interested.
Does that make sense?